Ex-IRS commissioner: Change in tax code not likely anytime soon because of scandal

Those clamoring for change in the tax code likely will have to wait longer due to the recent controversy at the IRS, according to a former agency commissioner.

The controversy relating to the list of conservative groups targeted for additional scrutiny before receiving tax-exempt status has delayed any type of bipartisan effort that would be needed to reform and simplify the tax code, said Mark Everson, who was IRS commissioner from 2003-07.

Everson spoke to a group Monday at The Lake Club in Poland about his time at the IRS and how recent events will impact the agency. The talk was organized by Hill, Barth & King LLC.

“There is certainly some simplification that is needed in the tax system,” Everson said.

But in the current political climate, the only way that could happen is if both sides agree in advance and “then jump off the cliff together,” he said.

“One of the strengths of the current system is its progressiveness,” Everson said.

The issue is how to keep a tax rate where the wealthy continue to pay more while still simplifying the system, he said.

Part of the current problem is that Republicans are trying to link the current issues at the IRS to the Obama administration and Democrats are just hoping the issue will go away. It is doubtful that it will ever be proved that the president or anyone from his administration ordered anyone to target conservative groups, Everson said.

“For the current controversy there had to be failures on multiple levels,” he said.

The employees should not have come up with a list that targeted certain groups, and management there should have been listening to what was going on, Everson said.

Everson said he started getting calls from reporters and congressmen about the issue in 2012, and the current administrators should have been investigating after they received those same calls.

During his time as commissioner, Everson said the office investigated the actions of tax-exempt organizations and their role in campaigning.

“There are always questions about the urban churches getting people to vote,” he said.

But the effort was conducted carefully to make sure that neither side was unfairly targeted, Everson said.

James Rosa, principal at Hill, Barth & King LLC, said he hoped during the speech that Everson would be able to relate how the public would be impacted by the controversy at the IRS.

“I wanted to get some insider insight on what is going on at the IRS,” he said.

The key to all these incidents is how they impact taxpayers and people who run businesses, Rosa said.

One of the current issues at the IRS is that a number of people are retiring from the organization who have been there for a long time, Everson said.

“Those upper-administration positions are going to be hard to replace [because of the reputation of the IRS],” he said. “This is going to be like the perception of the military following Vietnam. I think it’s going to take the IRS at least a decade to recover.”

There have also been a lot of senior IRS employees who have been taken away from tax returns to deal with the Affordable Care Act, which will impact the agency’s primary tasks, Everson said.